MCD vs. SBUX, CMG, YUM, DPZ, DRI, TXRH, WEN, EAT, CAKE, and BLMN
Should you be buying McDonald's stock or one of its competitors? The main competitors of McDonald's include Starbucks (SBUX), Chipotle Mexican Grill (CMG), Yum! Brands (YUM), Domino's Pizza (DPZ), Darden Restaurants (DRI), Texas Roadhouse (TXRH), Wendy's (WEN), Brinker International (EAT), Cheesecake Factory (CAKE), and Bloomin' Brands (BLMN). These companies are all part of the "restaurants" industry.
McDonald's (NYSE:MCD) and Starbucks (NASDAQ:SBUX) are both large-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, media sentiment, institutional ownership, dividends, valuation, earnings and community ranking.
McDonald's has higher earnings, but lower revenue than Starbucks. McDonald's is trading at a lower price-to-earnings ratio than Starbucks, indicating that it is currently the more affordable of the two stocks.
McDonald's has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, Starbucks has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.
McDonald's has a net margin of 33.36% compared to Starbucks' net margin of 11.38%. Starbucks' return on equity of -49.91% beat McDonald's' return on equity.
In the previous week, Starbucks had 6 more articles in the media than McDonald's. MarketBeat recorded 34 mentions for Starbucks and 28 mentions for McDonald's. Starbucks' average media sentiment score of 0.57 beat McDonald's' score of 0.52 indicating that Starbucks is being referred to more favorably in the news media.
McDonald's pays an annual dividend of $6.68 per share and has a dividend yield of 2.6%. Starbucks pays an annual dividend of $2.28 per share and has a dividend yield of 2.8%. McDonald's pays out 56.7% of its earnings in the form of a dividend. Starbucks pays out 62.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
McDonald's currently has a consensus price target of $316.15, suggesting a potential upside of 21.83%. Starbucks has a consensus price target of $96.43, suggesting a potential upside of 16.95%. Given McDonald's' stronger consensus rating and higher possible upside, equities analysts clearly believe McDonald's is more favorable than Starbucks.
Starbucks received 45 more outperform votes than McDonald's when rated by MarketBeat users. Likewise, 76.72% of users gave Starbucks an outperform vote while only 71.97% of users gave McDonald's an outperform vote.
70.3% of McDonald's shares are owned by institutional investors. Comparatively, 72.3% of Starbucks shares are owned by institutional investors. 0.2% of McDonald's shares are owned by company insiders. Comparatively, 2.0% of Starbucks shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
Starbucks beats McDonald's on 11 of the 20 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding MCD and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
This chart shows the average media sentiment of NYSE and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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